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Chancellor rejects Europe’s ‘idiotic’ banking deal

Peter Stiff

May 3 2012, 1:26am, The Times

The Chancellor says signing up to watered-down capital requirements for banks could make him 'look like an idiot'Times photographer, James Glossop

Britain’s relationship with Brussels took another hit last night after George Osborne refused to sign up to watered-down capital requirements for banks that he said could make him “look like an idiot”.

The Chancellor’s comments came as European finance ministers attempted to reach agreement on how to implement Basel III rules that require banks to raise their core tier one capital — a measure of financial strength — to 7 per cent by 2019. Mr Osborne wants to toughen up the EU’s interpretation of the rules, which he says could include loopholes to let some banks in Europe sidestep capital buffer levels. He also wants the freedom to impose higher capital buffers without the need for European permission in order to avoid another financial crisis.